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Background Check Supplier Assessment


Investment companies increasingly find it necessary to include background checks as part of their due diligence of target and investee companies. Private Equity firms look to verify and validate the personal and professional backgrounds of the Board members of the company in to which they are looking to invest. Likewise, Hedge Fund of Funds require a detailed understanding of both the hedge funds in to which they are looking to invest, and also the actual hedge fund managers themselves. At the end of the day, these are the people who are responsible for generating the return that investment companies are seeking – failing to check their backgrounds would be an act of professional incompetence on the part of the investment companies.

But who checks the checkers? The quality of background check assessments, of both individuals and corporations, varies hugely from country to country and from background check supplier to supplier. For example, most background check suppliers rely on 3rd party vendors on the ground in countries around the world, to search court records and conduct other local investigations on their behalf. Very often, the relationship between these vendors and the parent background check supplier is tenuous to say the least, with no contractual arrangements in place and no defined background check process that is being followed. Yet investment companies sometimes invest billions of dollars on the back of background check reports that are cobbled together based on inaccurate and misleading information gathered in this way.

The above is just one example of the operational incompetence of some background check suppliers.

H.D. Management acts on behalf of investment companies, conducting operational background check suppliers assessments to help ensure that the background check reports are worth the paper they are written on.

Case Study

One example of our work can be found in the following link:

HFOF Background Checks Supplier Assessment

We were contracted by a leading Hedge Fund of Funds (HFOF) and asked to conduct a global assessment of background check suppliers, the purpose of which was to identify a background check supplier who could undertake credible background checks on the behalf of the HFOF. We were given a blank sheet of paper with which to start. On the back of that we delivered the project as defined in the brief below.

Project Brief:

1. Aim:

To review the top five background check suppliers in the world to establish whether any of them would be a more suitable supplier to ABC HFOF than the current supplier.

2. Timescale:

Project to be completed by end March 2006

3. Deliverable:

A summary report with supporting detail attached

4. Methodology:

  1. Robert Johnson of ABC HFOF has instructed Hugh Craigie Halkett of H.D. Management to prepare and review a list of background check suppliers who have the capability to provide ABC HFOF with a suitable service.
  2. Hugh Craigie Halkett will research and compile a global list of background check suppliers from the internet. This list will be reviewed with Robert Johnson to identify the top five most appropriate suppliers to ABC HFOF’s needs.
  3. Hugh Craigie Halkett will contact the top 20 global hedge fund of funds to establish who their current background check suppliers are and add these suppliers to the list garnered from the internet.
  4. Hugh Craigie Halkett will then contact the list of suppliers and email them current (anonymised) Background Check SLA requesting: -
    a. Whether they feel they can satisfy ABC HFOF’s documented requirements
    b. A brochure or other related materials in support of the above
  5. 5. On confirmation of item 4, Hugh Craigie Halkett will review all documentation received and conduct telephone interviews with the top ten suppliers.
  6. On the back of these telephone interviews, documentation reviews and discussions with Robert Johnson, Hugh Craigie Halkett will select five suppliers for on-site reviews which Robert Johnson will verify.
  7. Hugh Craigie Halkett will conduct an on-site review of each of the five suppliers.
  8. Once all five visits had been completed, Hugh Craigie Halkett would prepare a report reviewing capabilities of all five suppliers and submit such report to Robert Johnson.


The conclusion of the above case study was that two background check suppliers were recommended to the HFOF. The HFOF reviewed the two suppliers and engaged one of them as their background check supplier.


If you have concerns with reference to your existing background check supplier or wish to engage a new background checks supplier, please feel free to contact Hugh Craigie Halkett directly on +44 (0) 131 558 1070 or by email at hugh@hdmgmt.co.uk

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